New Delhi: Amidst subdued response from Unified Pension Scheme (UPS), question was raised in the Lok Sabha earlier this week whether the government proposes to restore the Old Pension Scheme (OPS).
Lok Sabha CPM MP from Bihar’s Arrah and Utkarsh Verma Madhur, Samajwadi Party LS MP from Kheri raised the question in the lower house on August 11, seeking response from the Finance Ministry regarding the details thereof and along with the reasons for introducing UPS.
The UPS pension scheme introduced by the Government is effective from 1 April 2025, as an option under the National Pension System (NPS) for Central Government employees.
(Also Read: Cheque Clearance Gets Faster)
Â
Restoration Of OPS: FM Nirmala Sitharaman Responds
Finance Minister Nirmala Sitharaman, responding to the question said there is no proposal under consideration of the Government for restoration of Old Pension Scheme (OPS) in respect of Central Government employees covered under National Pension System (NPS).Â
The Government had moved away from OPS due to its unsustainable fiscal liability on the Government exchequer. NPS is a defined contribution-based scheme which was introduced for Central Government employees (except armed forces) joining service on or after 01.01.2004, FM said.Â
(Also Read: HDFC Service Charges)
Â
With a view of improving upon the pensionary benefits for such employees, a Committee was constituted under the chairpersonship of the then Finance Secretary to suggest measures to modify the NPS. Based on the deliberations of the Committee with stakeholders, Unified Pension Scheme (UPS) has been introduced as an option under NPS with the objective of providing defined benefits after retirement to the Central Government employees covered under the NPS, she added.
UPS Family Member Exclusion
Question was also raised regrading exclusion of unemployed son, unmarried/widowed/divorced daughter and dependent parents from the definition of family in UPS, by the MPs.
FM said, the features of UPS including the definition of family have been designed in such a way so as to ensure payment of assured payouts while also maintaining fiscal sustainability of the fund. Further, the Government employees who opt for UPS under NPS shall also be eligible for option for availing benefits under the CCS (Pension) Rules, 2021 or the CCS (Extraordinary Pension) Rules, 2023, in the event of death of the Government servant during service or his discharge on the ground of invalidation or disablement.
The MPs also sought to know about the reasons for the reduced pension in UPS as compared to OPS and the declaration of UPS only through a Press release.
FM responded saying that UPS has been introduced through a notification by the Government on 24.01.2025, as an option under NPS. Under UPS, assured payout is admissible on retirement @ 50% of twelve monthly average basic pay, immediately prior to retirement after a minimum 25 years of qualifying service. In case of lesser qualifying service period, proportionate payout would be admissible.